Articles on this Page
- 09/07/15--09:57: _Consumer watchdog t...
- 09/08/15--08:33: _Corruption watchdog...
- 09/08/15--09:09: _Bar accused of deny...
- 09/09/15--07:20: _Senate scrutiny: A ...
- 09/09/15--08:20: _Slippery stairs: Co...
- 09/09/15--13:32: _Former director at ...
- 09/10/15--08:03: _Fair Work orders HR...
- 09/10/15--08:21: _Cafe threatens to g...
- 09/10/15--08:49: _Party’s over: Forme...
- 09/10/15--09:40: _ACCC urges small bu...
- 09/13/15--08:56: _Gambling giant Bet3...
- 09/13/15--09:17: _Shady imports: Pepp...
- 09/14/15--08:54: _Mountain Bread orde...
- 09/14/15--09:36: _Unfair contracts le...
- 09/15/15--08:07: _NSW consumer watchd...
- 09/15/15--08:55: _Gym employee arrest...
- 09/15/15--09:20: _Talos Accounting Gr...
- 09/16/15--09:24: _Former Kimberley Di...
- 09/17/15--08:38: _No crying: Forklift...
- 09/22/15--08:24: _Public warning issu...
- 09/07/15--09:57: Consumer watchdog to review Australia Post’s $1 stamp plan
- 09/08/15--09:09: Bar accused of denying entry to males in discrimination lawsuit
- 09/14/15--09:36: Unfair contracts legislation gets green light in Senate
- 09/15/15--09:20: Talos Accounting Group enters liquidation owing creditors millions
The Australian Competition and Consumer Commission will investigate Australia Post’s proposal to increase the costs of stamps for its basic mail delivery service from 70 cents to $1.
The proposal, which would see a two-tiered mail system introduced with slower delivery timetables on a basic postage rate of $1 per letter, is expected to become a reality by the January next year if approved by the federal government.
While the ACCC is not involved in approving the mail carrier’s proposed price increase, the regulator is required to assess the proposal against the Competition and Consumer Act and then tell Australia Post if it objects to the change.
The ACCC is currently calling for submissions from members of the public and will publish its findings by November.
As part of its review, the ACCC will look at how Australia Post shares its costs across its services, the mail provider’s forecasts for letter demand and review and if the slower delivery timetable will result in cost savings across the organisation.
ACCC chairman Rod Sims said in a statement under Australia Post’s proposal, a $1 basic postage rate will “significantly reduce the losses on Australia Post’s stamped letters by 2016-17”.
“Further, Australia Post’s monopoly letter services (stamped and bulk business mail) are forecast to reverse their previous loss making state by 2016-17,” Sims said.
"This would be a turnaround in a short period with the price increase.
“However, stamped letters would continue to face losses and there is uncertainty around the longer-term rate of decline in letter volumes and a risk Australia Post’s overall monopoly letter services could return to net losses.”
A spokesperson for Australia Post told SmartCompany this morning Australia Post lodged a draft notification with the ACCC in August to seek an increase in the basic postage rate (BPR) from 70 cents to $1 to “better reflect the cost of the regulated letters service”.
Australia Post had announced in March that it would seek to lift the BPR to $1 to apply to a new regular letters service for consumer mail.
At the time, Australia Post said while the planned BPR increase and service changes would reduce losses to do with mail volume, the changes would not be enough to return stamped mail to profit.
“The changes will keep post offices open – including Australia Post's vital regional and rural network - keep posties delivering five days a week and ensure Australians everywhere can still access a world-class delivery service,” a spokesperson said at the time.
“Business and government customers will continue to receive volume incentives at the same level as they do now, relative to the full rate.”
“These changes are expected to be implemented in January 2016.”
Last month the Post Office Agents Association (POAAL) said the push for a two-speed letters service was met with a mixed reaction from the operators of licenced post offices.
POAAL director Bob Chizzoniti said in a statement it members' payments are linked to the price of the postage stamp and when the price of postage goes up, those payments increase.
He said this includes payments for sorting mail and payments for PO Boxes.
“Our members can see that a price increase will give their businesses a short-term boost, but they are worried what the long-term effect on stamp sales might be,” he said.
Chizzoniti said licensees are concerned that the slower “regular” service might hasten the decline in letters volumes.
“The letter is a powerful promotional and marketing tool – study after study shows that the letter is far superior to email. Let’s hope that a slower, more expensive product won’t undermine the effectiveness of the letter,” he said at the time.
Chizzoniti said POAAL has long stated the letters service is in need of reform, but reform on its own isn’t enough.
He said Australia Post needs to find new income streams while reinforcing the value of the letter.
“We are disappointed that Australia Post has waited until losses in letters were so large before acting," Chizzoniti says.
"POAAL had preliminary discussions with Australia Post some years ago to discuss possible reforms to the letters business, but Australia Post management had their fingers in their ears.”
SmartCompany contacted POOAL but did not get a response prior to publication.
A Sydney-based security group that was the subject of an Independent Commission against Corruption (ICAC) hearing in 2012 has collapsed after the Australian Tax office initiated a wind-up application against the group.
Kings Security Group, whose former clients are reported to have included the Art Gallery of NSW, the former North Sydney Central Coast Area Health Service, NSW Businesslink, the University of Western Sydney, Woollahra Municipal Council, Sydney Ports Corporation, Taronga Zoo and the former Department of Housing, fell into administration on September 4.
Mitchell Ball of BPS Recovery was appointed to manage the administration process. Ball told SmartCompany this morning his appointment is related to a wind-up application filed against Kings Security Group by the ATO, which was lodged on August 27.
“The deputy commission of tax had wind-up proceedings commenced against the group,” Ball says.
Ball says while it is too early to determine outstanding amounts owed to the company’s creditors, since being appointed as administrator on Friday he has been going through the initial stages of the process.
He says the directors of Kings Security Group are expected to propose a deed of company arrangement in coming weeks to ensure the best returns for creditors and outcomes for employees.
“I’ll make my assessment, financial and otherwise, to determine whether continuity is in best interests of all creditors and if so, I expect there will be a deed of company arrangement in about two-half weeks,” Ball says.
The first meeting of the company’s creditors will be held in Sydney on September 16.
A major meeting of creditors, which will determine the company’s future, is expected to be held in early October.
Kings Security Group was in the spotlight last year after concerns were raised about it being awarded a NSW state government contract to protect Sydney police stations.
A report from Fairfax about the company followed a five-week NSW ICAC hearing in June of 2012 that attempted to get to the bottom of allegations the company had offered bribes and other perks such as trips to Las Vegas in exchange for lucrative public contracts and its employees had engaged in alleged corrupt conduct.
SmartCompany contacted Kings Security Group but did not receive a response prior to deadline.
A popular bar in the Melbourne CBD will be forced to defend itself before a tribunal, after a law student who was refused entry to the venue in July filed a lawsuit claiming discrimination.
In a claim lodged in the Victorian Civil and Administrative Tribunal, Joshua Findley claims he was refused entry to Curtin House on Swanston Street, late one evening in July while out with three friends, two men and a woman, because there were “too many guys” in the group.
Curtin House is home to a number of bars, including Cookie and the Curtin House Rooftop bar.
“There is no doubt that had we all been female, we would have been let in,” Findley said in his claim, according to the Herald Sun.
“My friends and I were planning on a good night at Cookie. Due to discrimination this was not allowed to happen.”
Findley alleges a security guard told the group they would not be allowed to enter the venue because the group was made up of mostly men.
“These are bars … (that) have certain policies that ensure there are more women in the venue than men,” Findley said in the claim.
“Most would create another reason for refusal… in this instance, the bouncer explicitly said there were too many guys in our group.”
The Herald Sun reports Findley’s claim has been lodged against Curtin House Rooftop, the business that occupies two of the levels in Curtin House.
However, two other venues in the building, as well as the company that manages the building’s security, could also be added to the action.
Curtin House Rooftop has denied Findley and his friends were refused entry to the venue on the basis of their gender, saying the group was prevented from entering the venue because they were intoxicated.
“I believe there may be a misunderstanding,” said Gran Gould, the manager of the Rooftop bar, in an email to Findley.
“Your group were not denied entry based on gender. I have viewed the CCTV footage and a number of male patrons do indeed gain entry. It’s evident males were not being subject to any alleged discrimination.”
However, Findley and two of the other members of the group dispute the claim that they were intoxicated and have lodged affidavits saying this with the tribunal.
A conference to review CCTV footage of the incident has been scheduled for November 12.
Emma Jervis, principal at LegalVision, told SmartCompany it is unlawful to discriminate on the grounds of sex in the provision of goods and services and consumers are protected under both state and federal laws.
“In determining if the club has indeed been discriminatory in breach of the relevant laws, it will be necessary to examine the conduct and determine, firstly, if it fits the statutory definition of ‘discrimination’ and secondly, whether there are any valid defences or exceptions available,” Jervis says.
Jervis says the tribunal will consider if the venue treated Findley less favourably then it would have a women, and secondly, if the business’ conduct is the normal practice of the club or “whether it was an inherent requirement of the club to have some sort of gender balance”.
“While the final outcome of the claim is questionable, it certainly raises issues for employers and service providers as to the practical steps they should take to avoid allegations of discrimination,” Jervis says.
“Here, knowledge is key. In order to recognise behaviour as potentially discriminatory, knowledge of what discrimination actually is, is essential.”
“Particularly when staff and contractors regularly engage with members of the public, it is wise for business owners to have in place policy documents – and a requirement they be read – so as to put in place proper processes for staff to follow,” she adds.
SmartCompany contacted Curtin House Rooftop and Cookie but did not receive a response prior to publication. SmartCompany was unable to contact Joshua Findley.
As the focus on investigating and prosecuting Australian companies for foreign corruption increases, so too does the need for SMEs in particular to foster robust corporate cultures of compliance.
The federal Senate has recently voted in favour of undertaking an inquiry into corrupt practices by Australian entities operating in foreign jurisdictions.
The approval of the Senate inquiry is a timely reminder and opportunity for companies whose operations extend beyond Australia’s borders to take stock of their current compliance programs.
SMEs in particular should consider whether there exists a sufficient level of awareness within their organisations with respect to the consequences of falling foul of the law. In 2014, the OECD noted that many companies, but especially SMEs, were unaware of the risks they run in Australia by engaging in certain activities abroad.
Small and medium size businesses may also encounter specific kinds of difficulties owing to resourcing restrictions (whereas large corporations increasingly have teams dedicated to these issues). For these reasons it is particularly imperative that SMEs have access to quality best practice advice in developing appropriate policies and procedures.
All business owners must bear in mind that whether a business can defend itself against allegations of violations of anti-corruption laws will depend in large part upon the extent to which the company is able to demonstrate a robust corporate culture of compliance.
A five-step ‘health check’ is a useful starting point for companies to assess the state of their compliance programs:
1. When was your last risk assessment? Knowing the nature and extent of the risk you face is preliminary to being able to reduce it. A thorough risk assessment should reveal any areas of vulnerability and lead to codes of conduct, policies and procedures being tailored appropriately. Importantly, SMEs are often subsidiaries of overseas parents and may be directed to operate in a certain manner – particularly where those subsidiaries are wholly owned. It is therefore vital that SMEs in such a position are cognisant of the nature of, and risks associated with, the tasks they are directed to undertake overseas or in dealing with foreign public officials in Australia.
2. Do you have an up-to-date code of conduct? It is imperative for businesses to make clear the expectations and rules surrounding conduct, and to ensure that employees, executives, boards and agents understand the standards to which they must adhere. An unequivocal and clearly communicated code of conduct can be one effective way of disseminating this information.
3. Have you implemented appropriate policies and procedures? Demonstrating a culture of compliance is virtually impossible if you can’t point to policies and procedures designed to promote such a culture. These policies should address not only prevention, but also appropriate responses to alleged misconduct. In respect of the latter, there must be clear internal reporting procedures aimed at encouraging those who encounter misconduct to report it, as well as rigorous internal investigation procedures. All policies must be based on best practice advice that is cognisant of the potential for a business’s activities to contravene the provisions of other jurisdictions’ foreign corrupt practices legislation. This is particularly relevant in the context of policies regarding facilitation payments, which are currently permissible in Australia but prohibited in several overseas jurisdictions, including the UK. Finally, monitoring is important; if a policy or procedure is revealed to be ineffective, it must be fixed
4. Have you trained your staff in your policies and procedures? Simply having appropriate codes of conduct, policies and procedures in place is unlikely to offer sufficient protection if allegations of violations are raised. Businesses need to ensure that all staff – and executives, boards and agents – are adequately trained in codes of conduct, policies and procedures and are given refreshers both periodically and when changes are implemented.
5. Does your workplace environment foster compliance? This depends upon the four preceding steps having been sufficiently adopted and, crucially, all staff – particularly those in senior positions – being dedicated to adhering to the highest standards of ethical conduct and requiring and promoting transparency at all times. Companies should also bear in mind that having a truly robust culture of compliance extends to expecting business partners to be compliant.
The commencement of the Senate inquiry signals that confronting issues surrounding foreign corrupt practices is high on the political agenda. Australian companies operating in foreign jurisdictions – which includes companies operating via foreign agents or whose subsidiaries act in foreign jurisdictions – must adopt, monitor and adapt, if required, stringent measures to both prevent and act upon allegations of foreign bribery and corruption.
Ula Strus is a lawyer and Catherine Williams a paralegal at Holding Redlich.
A New South Wales court has upheld an appeal against a judgment that awarded a security guard $2.2 million in damages after slipping on some stairs at work in wet weather.
The Court of Appeal last month overturned an award by the NSW Supreme Court after finding the evidence was not sufficient to establish negligence by the security guard’s employer.
Shane Hennessy was awarded the payout after suffering a lower back injury while working for security provider FBIS at the Port Botany container terminal nearly 10 years ago.
NSW Supreme Court Justice Stephen Campbell found the “awkward” height of the entrance to the gatehouse at the top of the stairs in combination with slippery conditions when wet had exposed Hennessy to the risk of injury.
He also found an intermediate step and awning would have been reasonable precautions for wet weather.
Campbell approved an award of $1.3 million from Patrick Stevedores, which operated the facility, and $875,000 from FBIS.
But the Court of Appeal found it was unlikely an awning would prevent the door sill from becoming wet and the finding that the step was “awkward” was not available to Campbell.
The Court of Appeal set aside Campbell’s decision on the basis the evidence was insufficient to establish Patrick Stevedores and FBIS had been negligent.
Emeritus Professor Harold Luntz of Melbourne University Law School told SmartCompany the Court of Appeal found the trial judge had misapplied the basic law to the particular facts of the case.
“Every set of stairs is slippery there was nothing to show there was anything especially slippery about this one,” he says.
Luntz says the Court of Appeal found the solutions proposed by FBIS, such as putting an awning over the step, would not really have made any difference.
He says for business owners looking for guidance decisions like this one, which turn on the facts of the case, are not helpful as they don’t lay down any particular rules.
“If there’s a danger of slipping you have to take reasonable precautions to prevent anyone slipping on it,” he says.
“The age-old problem is what does reasonable mean? Reasonable means what the judges in the end think is reasonable.”
SmartCompany contacted Hennessy through his lawyers for comment but did not receive a response prior to publication. Patrick Stevedores (now Asciano) and FBIS declined to comment.
A former director at disgraced weight loss company SensaSlim has been convicted for giving false or misleading evidence to the Australian Competition and Consumer Commission.
Michael Boyle pleaded guilty to two charges of breaching the Competition and Consumer Act in the Federal Court in Brisbane this week for his knowledge of notorious serial conman Peter Foster’s involvement in the SensaSlim business’s franchise disclosure document.
Boyle was convicted and fined $3500 for the offence.
According to the ACCC, the offences relate to a failure of Boyle to appear before the commission to give evidence after a compulsory notice under section 155(1)(c) of the Competition and Consumer Act.
ACCC chairman Rod Sims said the watchdog took non-compliance with this section “extremely seriously”.
Alistair Little, partner at TressCox Lawyers, told SmartCompany it appeared Boyle had failed to properly answer questions under section 155(1)(c) examination.
“It is a good illustration of the ACCC paying enormous attention to claims that have particular healing or health benefits without that being the case,” he says.
Little says the section of the consumer act used in the case against Boyle gives the ACCC “extremely broad power” to require recipients to give evidence.
“You are very limited in grounds you can object to answering questions,” Little says.
“The ACCC can force you to come into meeting, failure to do so can result in a fine.”
Little says the important message is if a business receives a section 155 notice, “whether it requires you to attend in person or otherwise, you need to comply very strictly”.
“Failure to give proper answers or documents… can result in what happens here, the imposition of a fine and a conviction for knowingly giving false and misleading evidence.”
Little says other things for businesses to take note of are that it is important to know who you are going into business with.
“Foster has a long history of being a subject of consumer and competition law investigations over an extended period of time, not just in Australia but in other countries,” he says.
“If you decide to go into business with someone, it’s important you know about their background.
“If you walk into a business without knowing their background, you run a great risk of becoming liable for of offences it might commit in operating the business. “
An Adelaide-based HR consultancy business has been forced to pay a former employee more than $11,000, even though it had a valid reason for terminating her employment.
Sharon Kaibel started working for CKI People in December 2013 and the Fair Work Commission heard she was fired after downloading company files onto an external hard drive.
A fellow employee discovered Kaibel’s hard drive in the process of downloading the profiles while she was out of the office seeking medical attention for a migraine.
Kaibel’s manager then rang her, telling her to not come back to the office.
CKI’s chief executive then rang Kaibel later that afternoon to discuss why she appeared to be stealing company records.
Kaibel explained that she needed some of the files to continue working over the summer holidays, however, admitted that in hindsight her actions were “silly”.
The former HR consultant was subsequently fired and her behaviour reported to the police.
The Fair Work Commission ruled that while downloading the files was a serious breach of company policy, and therefore a valid reason to dismiss an employee, CKI People did not give Kaibel an appropriate opportunity to respond to the allegations of intellectual property theft before dismissing her.
As a result, Commissioner Peter Hampton found compensation was appropriate in this instance. Kaibel was awarded $11,505 along with superannuation.
Rachel Drew, partner at TressCox Lawyers, told SmartCompany this case has a number of lessons for small business owners.
“For small businesses, knowing what to do to ensure they provide a fair process to an employee who’s employment they’re considering terminating can be very difficult,” Drew says.
“The Small Business Fair Dismissal Code and checklist does provide some guidance for small businesses, but it’s not an absolute protection either.
“In this case the employer was a small business and they were still found to have not complied with the Small Business Fair Dismissal Code.”
“It’s important for small businesses to have a think about what process is being applied and make sure they are giving the employee a chance to respond to what the issue is – even where it’s a very serious issue.”
Drew says the vast majority of employers found to have unfairly dismissed their staff have been caught out by a lack of fair process.
“If an employer believes the issue or misconduct is very serious, the Fair Work Commission will frequently endorse the employer’s view on that,” she says.
“But it still requires a fair process, even if it’s as serious as something like intellectual property theft.”
SmartCompany contacted CKI People for comment but did not receive a response prior to publication.
The owner of a Sydney cafe has allegedly threatened to put his business into liquidation if the Fair Work Ombudsman proceeds with legal action over underpayment allegations made by a former worker.
The owner operator of Wild Sage Cafe in Cammeray, Arthur Antonopoulos, and his company Blue Hornsby Pty Ltd, are facing Federal Court proceedings for failing to reimburse a former pastry chef who was allegedly underpaid $22,329 between November 2012 and May last year.
The former chef, an international student from India who was on a 457 working visa at the time, raised her concerns with the Ombudsman after her employment at the cafe ended.
Following an investigation into the allegations, Antonopoulos allegedly told inspectors he would put his company into liquidation should legal action concerning the underpayments take place.
Fair Work Ombudsman (FWO) Natalie James said the inspectors attempted to resolve the matter but the owner and company had not co-operated, and are now facing a maximum penalty of $5100 and $25,500 respectively.
“We prefer to assist employers to rectify inadvertent non-compliance issues, but we are prepared to take legal action against employers who refuse to co-operate,” James said.
Will Snow, senior associate at law firm Finlaysons, told SmartCompany this morning the case contains important lessons for business owners and their companies when it comes to underpayment claims.
“It’s critical for businesses to understand not only if the entity is in the firing line but if the individual involved is in contravention of the act,” he says.
Snow says penalties for breaches of employment awards have recently increased to more than $10,800 for individuals or more than $50,000 for companies, and in this case, he believes the issue of underpayment could have been resolved at an earlier stage.
“If in this case they failed to comply at early stage, it increases the likelihood the FWO are going to prosecute you,” he says.
“If you’re a HR manager and you have knowledge you have been underpaying staff, you’re potentially facing over $10,000 as an individual.”
Snow also says threatening liquidation won’t necessarily protect an owner or company from liability.
“There is potential for an administrative liquidation proceeding to be unpicked by a court if they’ve done that to avoid a penalty,” he says.
“You can’t just disappear and say we’ve got no money and no assets, the court can unpick those arrangements.”
However, Snow says it might mean the former employee will not be paid back the money owed.
“Orders, judgements and legal orders are only as good as the person who has the ability to pay,” he says.
“Unfortunately the thing is this person might not get their money back because the business might not have anything.”
Snow says the main lesson for SMEs from the case is to heed the warning that individuals involved in a business can be personally liable for underpayments.
“This case really says for employers, if there is an individual in charge of a business who is involved in these issues, there’s potential for them to be personally liable,” he says.
Snow says the Fair Work Ombudsman is paying particular attention to how international workers are being treated by Australian companies.
“The right pay for employees is a fundamental entitlement the Ombudsman is rigorously pursuing on behalf of underpaid employees, especially those working under visa arrangements,” he says.
“There’s been a recent focus on the pay conditions of employees under visa arrangements, businesses should review where it has employees under visa arrangements and how they’re being paid.”
SmartCompany contacted Arthur Antonopoulos and Blue Hornsby but did not receive a response prior to publication.
The owner of a jumping castle franchise says he feels vindicated after two former franchisees were ordered to pay back his company more than $17,000 because they breached the terms of their franchising agreement.
Songning Li and Xiaomin Huang will also have to return $100,000 worth of equipment to their former franchisor, Jumping J-Jays, after allegedly “holding it to ransom”.
Jumping J-Jays was founded in 1997 and specialises in renting out inflatable jumping castles and slides for children’s birthday parties and other social events.
The company operates franchises in all of Australia’s capital cities as well as the Gold Coast, Townsville and Wollongong.
Li and Huang started running the Jumping J-Jays branch in the Melbourne suburb of Mill Park in September 2013.
However, the pair ceased operations in May last year and, in doing so, breached the termination clause of their franchising agreement
The pair took the matter to the Victorian Civil and Administrative Tribunal (VCAT) because they did not want to pay termination costs, alleging deceptive and misleading conduct on the part of the franchisor when they entered into the Jumping J-Jays franchising agreement.
However the Victorian Civil and Administrative Tribunal threw out every single one of the former franchisees’ claims, and found that the founder of Jumping J-Jays – John Newton – had acted appropriately and told Li and Huang to seek legal advice prior to signing the franchising agreement.
Li and Huang also claimed they would not have signed the agreement if they had the known how heavy the inflatable jumping castle equipment was.
However, the tribunal heard the Jumping J-Jays franchise agreement came with a risk assessment that outlined running the business involved “heavy lifting”.
As a result, the tribunal dismissed Li and Huang’s complaints and ruled the pair had to pay $17,613 to Jumping J-Jays as outlined in the termination clause of the franchising agreement.
The tribunal also ruled Li and Huang must return the company’s equipment within 30 days.
Jumping J-Jays founder John Newton told SmartCompany this morning he welcomed VCAT’s decision.
“Our documents were very thorough,” Newton says.
“They [the franchisees] said there wasn’t heavy lifting involved [in signing on], but it clearly stated that’s what you had to do and that’s what the judge found. They definitely knew what they were getting into.”
“It was very gratifying that we won on every point as we’re only little guys and were self-represented. All we did was follow the franchise agreement, which was pretty tight.”
Elizabeth Gore-Jones, principal of The Franchise & Business Lawyers, told SmartCompany franchising agreements are legally binding documents and potential franchisees should take their initial enquiries with a company very seriously.
“Seek specialist franchising legal advice,” Gore-Jones says.
“It is often a fine line for a franchisor to walk as to whether information may be interpreted by a franchisee to be a representation.
“It is well accepted that a franchisor can give information to franchisees in certain circumstances whereby that information will not be a representation, guarantee or warranty. In those circumstances the franchisee can rely upon the information but the franchisor does not guarantee, warrant or represent that it will be true for the franchisee.
“The franchisee needs to seek legal advice so that the franchisee can tell the difference between the two.”
SmartCompany was unable to contact Songning Li and Xiaomin Huang.
There have been “far too many instances of large firms racing to the bottom” in the quest for supermarket dominance, says Michael Schaper, deputy chair of the Australian Competition and Consumer Commission.
“There is no doubt the large scale retail market is becoming increasingly competitive,” Schaper told SmartCompany yesterday.
“It is important there are some commonly accepted practices otherwise there will be a race to the bottom. There have been far too many instances of large firms racing to the bottom already, so if this puts a floor under it, it will be a good thing.”
Stopping this “race to the bottom” is the purpose of the Food and Grocery Code of Conduct, which came into effect in June.
The competition watchdog is this week spreading the word about the code among small grocery suppliers.
An initiative that has been spearheaded by small business minister Bruce Billson, the Food and Grocery Code of Conduct protects grocery suppliers from retailers and wholesalers trying to change contracts mid-term, commits supermarkets to engage in good faith dealings with suppliers and establishes effective dispute resolution boundaries.
The voluntary code was developed in consultation with the major supermarket chains and currently has four signatories: Coles, Woolworths, Aldi and a smaller grocery chain, About Life.
“The first organisation to sign on was About Life, which has lead the way,” Schaper says.
“A little chain led the way.”
The code applies only to suppliers of those four chains and Schaper is keen to make sure these suppliers have read the code and understand the protections available to then.
The ACCC will administer the code and suppliers who are concerned about their dealings with the signatories can enter into confidential discussions with the regulator.
While the code has been operating for a number of months, Schaper says he is not aware of any grocer suppliers yet contacting the ACCC with concerns about their dealings with the supermarket chains.
Schaper says more retailers, including Metcash, signing on to the code is “a possibility”.
Metcash, which owns IGA and Foodland among other outlets, has previously indicated it supports the code and would test it on a trial basis.
And while Schaper says the code is not targeted at any specific group of grocery suppliers, he says those in the horticultural sector should be aware that the grocery code sits alongside the existing horticultural code of conduct, which does not cover their dealings with the supermarket chains.
“There are two codes but they are complementary. They deal with different situations,” he says.
Schaper says there should be no doubts among members of the grocery sector that the ACCC is willing to pursue any large companies that engage in unfair practices.
“I don’t think there is any doubt over the last year the commission has shown our willingness to take action against retailers over their practices with smaller firms,” he says, referencing the ACCC’s legal action against Coles in relation to its Active Retail Collaboration program.
“If having this code is another way in which retailers embed much better and fairer treatment of suppliers then it’s a step forward,” Schaper says.
“We need to set a new standard for the industry.”
Global gambling giant Bet365 could be forced to pay hefty fines after the Federal Court ruled the company engaged in misleading and deceptive conduct by advertising “free bets” to new customers for a 10-month period in 2013 and 2014.
Federal Court Justice Jonathan Beach said the actions of the Australian and UK arms of Bet365 ultimately amounted to customers who had never used online betting services before being drawn into a “web of deception”.
The conduct relates to a promotion from Bet365 operating companies Hillside (Australia New Media) and Hillside (Shared Services) that ran from March 18, 2013 to January 13, 2014 and offered “$200 FREE BETS FOR NEW CUSTOMERS”.
The Australian Competition and Consumer Commission launched legal action against the companies in August, alleging the offer was deceptive and misleading as the qualifications to the offer were not readily apparent to the users of Bet365’s website when they signed up.
The ACCC said that individuals that took up the offer had to spend hundreds of dollars before being able to withdraw any winnings.
The competition watchdog presented evidence to the court that new Bet365 customers had to spend their deposit and bonus amounts three times before they could withdraw any winnings associated with the “free” offer.
“As a result, a customer who makes an initial deposit of $200 and receives $200 must then gamble $1200 before being able to withdraw any money,” the commission said in a statement on Friday.
“The free bet offer was directed at new customers, which included inexperienced gamblers and young people,” ACCC chairman Rod Sims said in the same statement.
“The ACCC will take action where it thinks consumers are being mislead, especially in emerging markets where there are potentially vulnerable consumers.”
Justice Jonathan Beach ruled in the ACCC’s favour, saying new customers, as well as individuals who had previously had little experience with online betting websites, would have been “enticed” by the offer.
Beach will determine the penalties for the company at a future trial date.
“This judgment makes it clear that companies cannot use the word ‘free’ in offers to consumers where any conditions that seek to neutralise the ‘free’ nature of the offer are not clearly identified,” Sims said.
“Inducements like free bets run the risk of signing up new and inexperienced gamblers based on a deceptive claim.”
“Compliance with the Australian Consumer Law is essential for all companies that sell to Australian consumers, regardless of geographic location.
“Bet365 in the UK provided support to the Australian company including finance, customer service, and the Bet365 website.”
The ACCC also alleged the companies misled consumers in relation to representations offering deposit bonuses with qualifications and representations in January 2014, but the court dismissed those claims.
The court also rejected the ACCC’s claims that Bet365 Group Limited, the global parent company of Hillside (Australia New Media) and Hillside (Shared Services), was involved in the conduct.
Melissa Monks, special counsel at law firm King & Wood Mallesons, told SmartCompany this morning Bet365 is just the latest in a group of businesses that “have gambled and lost in using what has been described as a danger world – free”.
“For the claim to be made, goods or services need to be absolutely free of any charge or cost, no matter how insignificant,” Monks says.
“In this case, punters could only benefit with free bets if they risked their deposit three times, meaning they faced potential to lose up to $1200, which is by no accounts ‘free’.”
Monks says the Federal Court also rejected Bet365’s arguments that its provision of additional qualifying information about an offer attached to an asterisk meant the representations were not misleading.
Monks says this area is a common source of misunderstandings for businesses.
“Businesses should not rely on an asterisk as a miracle fix,” she says.
“If there are key limits to the claim being made, or an asterisked disclaimer will contract the claims, sticking this into a fine print disclaimer is highly likely to be misleading.
“And post-advertising steps will never cure a misleading marketing campaign. The courts talk about consumers having been ‘enticed into the marketing web’ on false pretences and consider this still to be misleading even if a consumer is made aware of the true position at some later stage.”
SmartCompany contacted Bet365 Australia but did not receive a response prior to publication.
SMEs in the retail industry are being warned to be extra vigilant, after packets of children’s crayons featuring popular cartoon characters Peppa Pig and Dora the Explorer were found to contain traces of asbestos.
While the Australian Competition and Consumer Commission said it does not believe the level of asbestos found presents a safety risk and a mandatory recall has not been issued, Senator Eric Abetz has told Fairfax the Australian Border Force has halted the importation of the crayons from places such as China until the government is assured the products are asbestos-free.
At least one retailer has removed the products from sale, with Officeworks issuing a statement saying it is working with the Australian Border Force as it waits for more information.
“We are in the process of conducting rigorous testing,” the retailer said.
“Officeworks takes our customers’ and team members’ health and safety very seriously.”
The crayons that have been tested by the ACCC and found to contain traces of asbestos include Dora the Explorer personalized 32 pack crayons, Dora the Explorer jumbo crayons, Arti Crafti 16 piece crayons and Peppa Pig 8 wax crayons.
The ACCC said independent testing has also identified traces of asbestos in two Disney-themed crayon products: Disney Frozen Jumbo Crayons and Disney Mickey Mouse and Friend Crayons.
State and federal agencies are working to help businesses remove the products from sale and are asking consumers who have purchased the goods to return the crayons to the place of purchase.
Retail businesses are advised to return the products to their suppliers, which should offer a refund or replacement of the goods.
The government is also asking retailers that have stocked the products to be prepared for customers returning the goods by having a bin available to properly dispose of the crayons.
Speaking to SmartCompany this morning, Australian Retailers Association executive director Russell Zimmerman said retailers should be aware that the level of asbestos identified is at a low level and therefore poses only an “extremely low risk”.
Nevertheless, he recommends all retailers who currently have stock of the crayons to make sure the products are disposed of properly.
Speaking more generally, Zimmerman also says retailers of all sizes should familiarise themselves with Standards Australia and the testing which that organisation can carry out.
“As an example, there are standards for cot heights, for flotation devices for swimming pools. Almost everything you can imagine,” Zimmerman says.
“If you are going to import products yourself, go talk to Standards Australia.”
Zimmerman says retailers that import should also research the businesses involved in their supply chain to ensure standards are being met.
“And always talk to the ACCC as they are the ones who prosecute if there is a problem,” he says.
Zimmerman says the potential costs of not meeting product standards are greater for smaller businesses.
“If you deal with a reputable organisation and you’ve got a problem, you can return the product and they will take it back,” he says.
“If you a small retailer that isn’t dealing with a reputable wholesaler, you stand the chance they won’t stand by you.”
The business that makes the popular Mountain Bread flatbreads has been ordered to reimburse a former worker more than $22,000 after the Fair Work Ombudsman found underpayments dating back over a period of 20 months.
Mountain Bread products are stocked in major supermarkets, but the family owned business was found to have underpaid the worker entitlements including minimum hourly rates, overtime and weekend and public holiday rates between June 2013 and March this year.
The 30-year-old worker, a Taiwanese backpacker on a 417 working holiday visa, was paid a flat rate of $16 an hour but was entitled to receive $21.69 an hour for normal house and $54.23 an hour on public holidays.
The ombudsman also found the bakery’s Chinese speaking production line managers frequently recruited backpackers and international students.
The bakery has entered into an enforceable undertaking with Fair Work and agreed to hire an independent expert to ensure it is compliant with workplace law over the next year.
Fair Work Ombudsman Natalie James said in a statement Mountain Bread had cooperated with the ombudsman.
“We use enforceable undertakings where we have formed a view that a breach of the law has occurred, but where the employer has acknowledged this, accepted responsibility and agreed to co-operate and fix the problem,” she said.
Rachel Drew, partner at TressCox Lawyers, told SmartCompany this is a situation involving a small business employer that has not familiarised itself properly with the provisions of award.
She says it appears Mountain Bread had a practice of rostering working holiday visa holders in out-of-hours timeslots.
“While there is some suggestion they were deliberately using visa holders for out-of-hours work, the FWO seems to have accepted it is inadvertent and through lack of knowledge of award,” Drew says.
Drew says the onus is on small businesses to remain complaint with workplace laws.
“The obligation always remains with the business to find out what their workplace obligations are,” she says.
“They need to get copy of the relevant award and make sure their knowledge of penalty rates and hourly rates remains current.”
Drew says while a lack of knowledge is unfortunately “very common” among small business owners, it does not reduce their liability.
“It is often difficult for a small business to keep up with industrial obligations but it is very important and particularly when engaging in… migrant workers,” she says.
SmartCompany contacted Mountain Bread but did not receive a response prior to publication.
Legislation to extend unfair contract term protections to small business was passed in the Senate last night.
Small business minister Bruce Billson previously promised the extension of unfair contract provisions for small business and the legislation represents an election commitment of the Abbott Government.
Specific amendments, which will see increased thresholds for coverage from $100,000 to $300,000 for contracts up to 12 months long and $300,000 to $1 million for contracts greater than 12 months, were added to the legislation in the Senate by the Greens Party, which want to see more businesses covered by the legislation.
The legislation will now be returned to the House of Representatives where the amendments will be considered.
Melissa Monks, special counsel at law firm King & Wood Mallesons, told SmartCompany this morning the amendments will mean a “much greater number of small business contracts” are captured by the legislation.
However, Monks says the Senate changes are “surprising” and represent significant increases in the thresholds, which will affect whether some contracts are eligible for protection under the regime.
“I think the Parliamentary debates and the broader community discussion for a few years now reflect the difficulty of trying to balance providing small businesses with protection with the fundamental concepts of sanctity of contract and having confidence in contractual arrangements,” she says.
Monks says the amendments, if passed in the lower house, will increase the transitional period from six to 12 months and this will give businesses more time to prepare.
“I think this is a sensible change that reflects the significant work required for all businesses – large and small - in getting staff up to speed with, and also rolling out internally, changes to policies, practices and contract terms,” she says.
Stephen Giles, partner at Norton Rose Fullbright Australia, told SmartCompany this morning he believes while there is a lot of support for the legislation in the Senate, senators also expressed a lot of “disquiet” in terms of the content of the bill and compliance costs.
He says the disquiet reflects some concern in the wider business community about the changes.
“A number of industry bodies are saying there are some significant compliance challenges with the legislation, a number of definitions are opened ended and ambiguous,” he says.
Giles says there is also significant concern that rather than help small businesses it will lead to small business being “excluded from opportunities” or result in the people who transact with small businesses incurring higher transaction costs.
Giles describes the legislation, which he thinks could be a world-first, as a “very all-pervasive piece of legislation” which could make it “very difficult for parties to get contractual certainty”.
“Business is built on the principal of freedom of contract. Australia is the only country in world to enact this legislation, it is a world first,” he says.
“I would think this legislation would come as considerable surprise to international companies wanting to do business in Australia.”
Giles, who says he has been “intensively involved in the debate” and has made submissions on behalf of the franchise sector, thinks while the franchise sector will be able to cope relatively well with the legislation, there are potentially far reaching consequences for all types of business.
“The legislation is well intentioned, but could hold significant issues for business,” he says.
“It’s more external businesses, because this will apply to all commercial contacts.”
“It applies to all businesses because it’s related to transactions with small business.”
An online appliance store has drawn the ire of the NSW Fair Trading Commissioner, who issued a warning last week to consumers about dealing with the company.
NSW Fair Trading Commissioner Rod Stowe last week issued the warning about United Appliance (Australia) after receiving more than 60 complaints about the business over the period of just over a year.
United Appliance (Australia) is an online store that provides service calls to customers for repairs of household appliances such as stoves, fridges and washing machines.
The NSW Office of Fair Trading said in a statement it has received 67 complaints related to customers making upfront payments for repairs and services but the business not honouring those contracts with clients, with some customers reporting representatives from United Appliance left their premises without finishing the repair job.
Consumers have also reported difficulties contacting United Appliance about their complaints, while others complained the work was not being done in a reasonable time frame.
Stowe said in a statement the alleged conduct of United Appliance is harming NSW consumers and he issued the public warning about the business under section 86A of the Fair Trading Act 1987.
Alistair little, partner at TressCox Lawyers, told SmartCompany this morning the Fair Trading Commissioner has the power to issue public warnings where they believe a business is selling unsatisfactory goods or services.
“The commissioner has to be convinced the disclosure is in the public interest but once satisfied can issue warnings of this sort,” he says.
Little says such warnings from the commissioner are “not done lightly” and for one to be issued about United Appliance, there must have been a “serious number of complaints” about the business.
“One would think the issuing of this notice would be extremely damaging to a business, and also it is likely to cause the Australian Competition and Consumer Commission to have a look at conduct of the business,” he says.
Little says a public warning of this sort is often just the first step and may not be the last.
He says there are various offences under Australian Consumer Law with regards to making false claims about warranties and services that can result in businesses and their directors incurring fines.
In such cases there is also the potential for criminal charges for offences such as taking money for provision of services and goods when there is no intention to make good on those promises.
“These are some potential problems to be faced by this company,” Little says.
“Individual directors can be personally liable, not just the company.”
Little says it is possible United Appliance did not have the appropriate mechanism to deal with complaints appropriately and says compliance programs to deal with customer complaints are very important for businesses.
Little says there are a number of lessons for other small businesses.
“The important thing to realise is if you’re going to offer a service, you need to be able to deliver that service,” he says.
“If you offer something without the ability to do so, you could be in breach of Australian Consumer Law which could lead you to have to pay damages but could also mean you are liable for prosecution.”
“If you do receive contact from Fair Trading or the ACCC, you should respond immediately, seriously and in detail.”
SmartCompany contacted United Appliance but did not receive a response prior to publication.
An employee of an Anytime Fitness gym in Adelaide who lost his job after being arrested for allegedly possessing steroids and selling prescription drugs has had his unfair dismissal case rejected by the Fair Work Commission.
Alexander Giulianetti commenced work as a gym manager at Anytime Fitness Parafield on April 30 and held the position until June 17. He filed an application for an unfair dismissal remedy the day after.
The franchise terminated his contract following an incident on June 4 that saw police arrest Giulianetti while at the gym and in front of members and staff.
According to the Fair Work Commission, Guileanetti was charged with unlawfully being in possession of steroids, prescription drugs and for allegations surrounding money laundering.
Anytime Fitness Parafield objected to the unfair dismissal application, saying Guilianetti had not completed the minimum employment period and was dismissed in accordance with the Small Business Fair Dismissal Code.
In order to claim unfair dismissal before the commission, workers must have been employed for either 12 months if the employer is a small business or six months for larger businesses.
In reaching his decision, Fair Work Commission deputy president Peter Sams said while in his opinion he could dismiss the matter on a “number of bases”, it came down to the short length of time that Guilianetti had been employed.
“As the applicant was dismissed on 17 June 2015 - some five weeks later - the applicant had not completed the minimum employment period, irrespective of whether the respondent was a Small Business Employer,” Sams said.
Ben Tallboys, senior associate at Russell Kennedy Lawyers, told SmartCompany this morning this is an unusual case.
“This is quite an extraordinary case in that it involves an employee being fired five weeks into their employment after being arrested at work and charged with a number of crimes,” he says.
“Even though the criminal charges have not yet been determined, and the employee is entitled to the presumption of innocence, it is not surprising that the employee was dismissed in those dramatic circumstances.”
Tallboys says whether or not the dismissal is unfair “really became irrelevant” because the decision turned on the length of time Guilianetti was employed.
“Generally employees need to be employed for six months to make such a claim or 12 months if employed as small business,” he says.
“In this case the Fair Work Commission ultimately dismissed the claim because the employee’s contract clearly demonstrated he had only been employed five weeks before his dismissal, meaning he had no right to make any unfair dismal claims.
“The fairness of his dismissal therefore became irrelevant.”
Tallboys says there are two points to take away from this case.
“It is always a risky business for an employer to dismiss an employee because of pending criminal charges that may ultimately be dismissed,” he says.
“Care needs to be taken by an employer in these situations to either independently investigate the charges or to wait for the criminal proceedings to be resolved.
“There are few situations were an employer can legitimately say it had to dismiss someone merely because of fact they were charged of a criminal offence, regardless of whether it is true or not,” Tallboys says.
“Employers should always get legal advice when contemplating any such decision.”
Tallboys says the decision also highlights the need for employers to clearly set out what behaviour is acceptable from employees both at and outside the workplace.
“Often this will be achieved by an employment contract or position description but sometimes a code of conduct may also be appropriate,” he says.
Anytime Fitness Australia acting executive director Richard Peil told SmartCompany this morning the franchisor and its franchisees did not tolerate “any kind of improper conduct”.
“The franchise owners at this club terminated the contract of the individual as soon as they became aware of this person’s improper conduct,” he says.
“As Anytime Fitness clubs are independently owned and operated, franchisees have reasonable discretion in the operation of their businesses, and these operations need to be consistent with legal requirements at all times.
“Anytime Australia is currently taking steps to remind our franchisees that we believe it is best practise to have a police check run on all potential new staff and contractors,” Peil adds.
SmartCompany contacted Anytime Fitness Parafield but did not receive a response prior to publication.
An accounting group has collapsed into liquidation, owing secured creditors about $7.5 million.
Talos Accounting Group, a Sydney-based accounting group that operated seven different accounting practices, was placed into voluntary liquidation by its sole director Stephen Lacy on August 11.
According to Fairfax reports, the Talos group has been linked to banned director Mark Bryers, who is reportedly going by another name and has been listed as the general manger of the group,
A number of small businesses have also been caught up in the collapse, with The Gladstone Observer reporting the owner of a Gladstone cleaning business is owed $17,000 because of the liquidation.
BRI Ferrier’s Andrew Cummins and Peter Krejci, who have been appointed as liquidators to the Talos group, told SmartCompany this morning they are running an asset sale process for seven accounting practices that made up part of the business.
The last of a series of creditors meeting is being held in Sydney today.
Cummins said in terms of assets, the liquidators have been appointed to seven operating entities and have already sold two.
“We expect another three will settle by Monday and offers on remaining two, which we think we will get a sale out of in the next week,” he says.
Cummins says while the annual turnover and full extent of debts owed by Talos are unknown, the group’s secured creditors are owed about $7.5 million and are “namely banks which financed acquisitions”.
He says about 30 employees across the practices have been affected by the liquidation.
“We continued employing all of them, but since [the business have been] sold the purchasers have taken over,” he says.
“We expect future sales will involve that process.”
Cummins says while the initial focus for the liquidators was on the realisation of assets, he will look more deeply into the failed business once that process is complete.
“We will focus on the investigation phase of the liquidation and there are some significant matters to deal with there,” he says.
Cummins says it is also likely more details will emerge following a meeting with the Australian Securities and Investment Commission that occurred about two weeks ago.
“After an initial discussion with ASIC, we understand it has some concerns about the Talos Group and we’re working with them,” he says.
SmartCompany was unable to contact Lacy for comment prior to publication.
The former chief executive of an ASX-listed diamond exploration company has been arrested in Sydney for allegedly misleading the Australian Securities Exchange.
Alexandre Alexander, the former chief executive of Kimberley Diamonds, has been charged with four offences relating to false and misleading statements under the Corporations Act.
Each offence carries a maximum penalty of five years in jail along with a $34,000 fine.
The behaviour is alleged to have occurred between October 2013 and March 2014 in Kimberley Diamond’s future earnings forecasts.
The Commonwealth Director of Public Prosecutions alleges statements to the ASX that were authorised by Alexander were false and misleading because they failed to disclose the company’s earnings forecast assumed a 30% increase in the value of its rare yellow diamonds due to a confidential deal with Tiffany & Co.
Alexander was arrested by the Australian Federal Police at Sydney airport yesterday morning while returning from a trip overseas.
The former chief executive appeared at Sydney’s Central Local Court via video link later the same day.
Alexander was granted bail subject to strict restrictions, including surrendering his passport to the Australian Securities and Investments Commission.
The matter was adjourned and is due to be back in court in November.
Kimberley Diamonds is an Australian-based company with assets in Botswana and Spain.
Its largest diamond-producing mine is located in Ellendale in Western Australia and is the world’s main source of rare yellow diamonds.
Ursula Hogben, principal and general counsel at law firm LegalVision, told SmartCompany making forward-looking statements is one of the riskiest things a company can do.
“The ASX continuous disclosure rules permit a company to keep a deal confidential, in certain circumstances including while it is still uncertain,” Hogben says.
“That’s commercially sensible and the ASX listing rules allow that. But you have to set out the facts your forward-looking statements are based on. That would be the correct path of balancing confidentiality on the one hand and giving the market proper information on the other.”
Hogben says it is crucial for business owners to check their financial statements very carefully with their chief financial officer and accountant to understand what they are based on and set out the reasoning behind any assumptions.
SmartCompany contacted Kimberley Diamonds but did not receive a response prior to publication.
A 63-year-old forklift driver has been reinstated after his employer fired him for failing to clean up spilt milk correctly.
The Fair Work Commission has ruled Christopher Tran, a forklift driver for Parmalat Food Products, was unfairly dismissed and should return to work.
Parmalat Food Products is the company behind popular brands including Pauls milk, Vaalia yoghurt, Ice Break coffee and Lemnos haloumi.
Tran had been a forklift driver at Parmalat’s factory in Sydney’s western suburbs since 2002.
In March this year, a palette collapsed in the factory causing milk to spill into a trailer.
A health and safety investigation took place the following week.
The investigation found Tran did not comply with the proper procedures for handling the incident, including entering the truck without it being “locked down”.
As a result, Tran’s employment was terminated a few days later.
Tran subsequently took the matter to the Fair Work Commission, arguing his dismissal was harsh because the punishment was disproportionate to the alleged offence.
Parmalat, meanwhile, argued Tran was a danger to both himself and other employees because he had been involved in an earlier collision with another forklift back in February.
However Fair Work Commission deputy president Jeff Lawrence was not satisfied there was a valid reason for Tran’s dismissal.
“At the highest level, the applicant had received a verbal counselling [back in February] and had been stood down from forklift duties for a week while the investigation took place,” Lawrence said.
“He had not received a written warning. When the 5 March incident occurred, he was driving forklifts. Even though the applicant breached policy, there were rational explanations for his actions. The applicant was honest and contrite in co-operating in the investigation.”
Warwick Ryan, workplace relations expert and partner at Swaab Attorneys, told SmartCompany mistakes in the workplace can cost people their lives.
“They [the Commission] have set a precedent here where an individual can be persistently careless in the workplace and be allowed to continue to operate and potentially endanger workmates,” Ryan says.
“In this case, there was a major factor that came into play – the age of the individual. That was a primary factor [in the final decision]. They took a great deal of sympathy to this individual even though it was his second accident.”
SmartCompany contacted Parmalat Food Products for comment but did not receive a response prior to publication.
A family-owned car dealership in New South Wales has had its licence suspended by the NSW Fair Trading Commissioner after a number of complaints were received about allegedly selling unroadworthy or defective used cars.
The NSW Fair Trading Commissioner Rod Stowe released a public warning on Friday against consumer dealings with Familyautogroup Pty Ltd and their website www.w4g.com.au.
According to the website, Familyautogroup is “one of the largest used 4WD specialist [sic] in Australia” with 30 years’ experience in the used car industry.
The Fair Trading office said it has received 64 complaints and 44 enquiries about the business over a period of about two years.
The majority of complaints were from customers who discovered the cars they had purchased were unroadworthy or defective.
The Office of Fair Trading has begun legal proceedings against the business.
The Commissioner urged those who had consigned their car to be sold by the business to pick them up and said customers who had bought a car and paid in full prior to September 16 to get in contact with the car group to arrange it to be picked up.
Catherine Logan, principal at LegalVision, told SmartCompany this morning Australian Consumer Law requires all goods supplied to consumers must be of "acceptable quality".
“It seems that the Department of Fair Trading in NSW is acting in this matter to enforce the consumer protection provisions under the new Motor Dealers and Repairers Act 2013,” she says.
Logan says this means Fair Trading NSW is looking at goods sold by the dealership to be safe and lasting, look acceptable and do all things someone would normally expect them to do.
“As with all goods, when determining what is ‘acceptable quality’, one must take into account the usual expectations of that type of vehicle and the market, and the price paid for it,” she says.
Logan says consumer law requires the seller to offer customers a replacement or a refund for a major failure and compensation for any other reasonably foreseeable loss or damage.
“Consumers are also entitled to have the goods repaired or replaced if the goods fail to be of acceptable quality and the failure does not amount to a major failure,” she says.
“Fair Trading NSW inspectors are empowered by the act to issue enforceable rectification orders to resolve disputes between dealers and customers and failure to follow those orders can result in disciplinary action against the dealer as appears to have been the case here.”
SmartCompany contacted Familyautogroup but did not receive a response prior to publication.